The priest, Father Tony McSweeney, 66, from St George’s Church in Norwich, and another man aged 70 from East Sussex were arrested yesterday morning on suspicion of sexual offences.

The allegations, dating from the early 1980s, are linked to the former Elm Guest House and the now closed Grafton Close children’s home in Barnes, south west London.

Detectives are probing claims the guest house was used by people to abuse boys from the home.

The 70-year-old arrested is thought to have worked at the care home.

Father Mark Hackeson issued a statement on behalf of the Diocese of East Anglia stating: “The Rev Tony McSweeney, a priest of the Diocese of East Anglia, is currently assisting police with their inquiries into historical allegations of the sexual abuse of children.’’

Fr David Bagstaff, diocesan administrator of the diocese of East Anglia, said: “The safeguarding of children and vulnerable people is of paramount importance to the Catholic Church and the diocese is co-operating fully with the police in this investigation.”

Fr McSweeney was appointed a director at Notre Dame High School in Norwich in April last year.

He has been a priest for almost 29 years, celebrating his silver anniversary in February 2009 with a service in Norwich.

The 66-year-old trained at St John’s seminary near Guildford and is the priest of St George’s Catholic Church on Sprowston Road in the north of the city.

He also conducted a service at Norwich City FC in 2004.

A spokesman for the football club said: “Father McSweeney wrote to joint majority shareholder Delia Smith suggesting he would like to become a Norwich City Chaplain.

“Subsequently the Club did agree he could help to hold a one-off multi-denominational service to celebrate their return to the Barclays Premier League. That service was duly held after our opening Premier League fixture against Crystal Palace on August 14, 2004.

“There was no prior connection between Delia Smith and Father McSweeney before he wrote to suggest joining the Club and he was never employed by the Club as a Chaplain.”

The arrests were made as part of Scotland Yard’s Operation Fernbridge, launched after concerns were raised in Parliament by Labour MP Tom Watson.

Speaking in Parliament in October last year, Mr Watson said a file of evidence used to convict Peter Righton of importing child pornography in 1992 contained “clear intelligence” of a sex abuse gang.

Mr Watson alleged that a member of the group had bragged about links with a senior aide to a former prime minister.

Commander Peter Spindler from the Metropolitan Police said: “This is a complex multi-agency investigation supported by the NSPCC, Ceop and Richmond Social Services involving non-recent allegations of sexual assault against children.

“It is vital that anyone who has been affected by or has information about activity in the early 1980s at the Elm Guest House, or the Grafton Close care home, in Barnes speaks to the NSPCC on their helpline on 0808 800 5000, or their local police.”

A spokesman for Richmond Council, which ran the care home, said: “Richmond Council considers the safeguarding of all children and young people as an utmost priority and we take any allegations of abuse very seriously.

“As such we are offering our full support and co-operation to the police during their investigation. As the investigation is ongoing, it would be inappropriate to comment further at this time.”

A spokesman for the Diocese of East Anglia said: “The diocese regards the safeguarding of children as of paramount importance and is committed to co-operating fully with the police in any such investigations.

“At present it would not be appropriate to make any further comment.”

Director of the NSPCC helpline Peter Watt said: “We are assisting the police on Operation Fernbridge and are asking anyone with information to come forward.

“We will assist the police in gathering evidence and supporting those who come forward. It’s important we recognise the massive impact abuse has on children and young people, often well into their adult life.”

The charity’s 24-hour helpline, which is staffed by trained counsellors, is also available by emailing help@nspcc.org.uk or via text message to 88858.